Financial access and opportunity in Ecuador
In 1978 Oikocredit made its very first loan to a non-profit organization working with farmers in Ecuador. Since then, Oikocredit has grown its portfolio in Ecuador significantly, with loans and investments in the country currently standing at € 49 million to almost 30 partners.
Oikocredit’s annual study tour visited Ecuador, providing investors, staff and volunteers a chance to learn more about social investing and the work of the local Oikocredit office and its partner organizations in the country.
A local hero and symbol of pride
One such partner that study tour participants visited was Cooperativa Daquilema in the rural province of Chimborazo, nestled high up in the Ecuadorian Andes. The cooperative takes its name from a local indigenous leader, activist and later martyr, Fernando Daquilema, who stood against the exploitation of his people in the mid to late 1800s. Daquilema, who has since become a symbol of indigenous pride and resilience in the area, was chosen to be the face of the cooperative, with his values strongly rooted in its mission.
Today, indigenous people make up 65% of the Chimborazo province. The majority of them live below the country’s poverty line, as they are excluded from the traditional financial sector and often face discrimination. Cooperativa Daquilema has made it its mission to restore pride and faith in the indigenous population, working almost exclusively with indigenous borrowers. The cooperative staff wear traditional dress similar to that worn by Daquilema himself, and make sure they always have staff that speak the local Quechuan language.
Loans for small businesses
During the study tour participants visited a number of Cooperativa Daquilema’s clients, including Segundo Vilema, a 70 year old milliner who owns his own store in Riobamba, the capital of the Chimborazo province and the city where Cooperativea Daquilema began. For Segundo, millinery has become second nature, now being in the business for close to 50 years. Hats are a very important commodity in Ecuador, being worn by both women and men and an integral part of traditional indigenous dress.
A decade ago his business was very small; however Segundo had ambition to expand. Wanting to import high-quality felt from Italy to produce Ecuadorian fedoras of the highest quality, he first needed capital. That’s where Cooperativa Daquilema came in. Segundo explained: “They have a social approach and want to support decent, hard-working people like me.” Segundo said he sees these values reflected in Cooperativa Daquilema, and appreciates this as well as their trust and support towards him: “They know me. They know I will always pay back my loan.”
The cooperative has approved every loan Segundo has applied for – the first one being US$ 3,000, the second US$ 6,000 and the third and latest US$ 10,000. These investments had allowed Segundo to grow his business. Earning a higher income has made it possible for him to pay for his children’s higher education, one of whom is now has a PhD in Chemistry.
This all would not have been possible without a microfinance institution such as Cooperativa Daquilema. The cooperative, which values entrepreneurship, has enabled people such as Segundo to be included in the financial sector and expand their business, something that was not possible a few decades earlier.
Cooperativa Daquilema has even introduced electronic payments by mobile phone in a country where few have a landline but most of the 15 million population have a mobile: all significant steps towards financial inclusion.